Rocket Internet eyes profit from startups, narrows quarterly loss

rocket

Rocket Internet’s three leading start-ups were on track to make a profit by the end of the year as the German investor lowers quarterly losses.

Oliver Samwer, Chief Executive Officer, did not name the start-ups following results from the group’s leading holdings. Rocket said it remained well funded with 1.5 billion euros ($1.68 billion) of cash.

Oliver declined to comment on possible flotations after Reuters reported that online food takeaway firm Delivery Hero is set to float before the summer break, while meal kit company HelloFresh could follow in the autumn.

HelloFresh saw sales growth slow to 45 percent from the 96 percent rate it recorded in 2016, while its adjusted EBITDA loss rose slightly to 29.6 million euros from 27.3 million.

Meanwhile, Rocket’s furniture websites, Westwing and Home24, both narrowed losses, with adjusted EBITDA losses of 3.6 million and 7.4 million, respectively.

This year, aggregate revenue rose 28 percent to 617 million euros ($689.44 million) in the first quarter, while the adjusted loss before interest, taxation, depreciation and amortization was 100 million euros, down from 120 million euros a year ago.

This development came after a month’s announcement, when the e-commerce investor reported losses of €741.5 million (£630 million) for 2016 as several companies in its portfolio struggle to become profitable. And Losses at Rocket were almost four times higher than losses in 2015, when the company reported a loss of €197.8 million (£168 million).

Rocket’s share price has tumbled in the last year as losses mounted and it was forced to slash valuations for key start-ups.

The Jumia e-commerce business in African continent saw sales continue to fall due to currencies tumbling in Nigeria and Egypt, but its gross merchandise value – which measures the value of goods traded on its sites – rose by a third in constant currencies.

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